NRF calls for gains in 2013 holiday sales

The NRF said it expects holiday sales to increase 3.9 percent to $602.1 million compared to the actual 3.5 percent growth in 2012, adding that this tops the 10-year average holiday sales growth of 3.3 percent. Holiday sales—as defined by the NRF—are sales in the months of November and December.

Despite the increasing flurry of economic headwinds currently blowing, retail sales for the 2013 holiday season are expected to be up on an annual basis.

The National Retail Federation (NRF) said it expects holiday sales to increase 3.9 percent to $602.1 million compared to the actual 3.5 percent growth in 2012, adding that this tops the 10-year average holiday sales growth of 3.3 percent. Holiday sales—as defined by the NRF—are sales in the months of November and December.

Even with an increase forecasted, there are more than a few things to be watchful and mindful of heading into the holiday shopping season, according to the NRF, including:
-the federal government shutdown, which took effect this week;
-pending concerns over the debt ceiling and government funding; and
-income growth and policies and actions related to foreign affairs

Countering those things, though, the NRF pointed to still positive housing growth as well as consumers buying larger-ticket items, too.

“The economy continues to expand, albeit at an unspectacular pace,” said NRF Chief Economist Jack Kleinhenz in a statement. “In order for consumers to turn out this holiday season, we need to see steady improvements in income and job growth, as well as an agreement from Washington that puts the economic recovery first. Our forecast leaves room for improvement, while at the same time provides a very realistic look at the state of the American consumer and their confidence in our economy.”

A somewhat modest holiday sales season forecast by the NRF seems to be in line with analysis by Robert W. Baird & Co. analyst Ben Hartford in a research note.

The analyst explained that he expects a modest but more “normal” 2013 Peak Season compared to 2012, which he described as weak, and he explained that this year’s retail sales environment is compressed as there are six fewer selling days between Thanksgiving and Christmas, a time when holiday shopping activity tends to be most active.

Recent data from trade intelligence firm Zepol suggested that holiday sales activity this year could improve over last year, because the holiday import months of July and August were 1.5 percent higher in volume compared with the same two months in 2012. Zepol said this hints at a more active holiday shopping season.

And Hackett Associates Founder Ben Hackett said that the U.S. economy is on the road to sustained growth, with second quarter GDP of 2.5 percent beating expectations, coupled with an improving unemployment outlook, with consumer spending expected to increase in the fourth quarter, with a good amount of that growth likely to come from back-to-school and the holiday season.

The most recent edition of the Port Tracker report, which Hackett and the NRF produce, said there are indications that holiday–related import activity is gaining traction. The report called for September volumes at United States-based retail container ports to increase 5.1 percent annually in September, with retailers preparing for the holiday season. The previous edition of the report noted import gains are expected through the holiday season.

“The consumer is feeling a bit better about spending as we enter this Holiday Season,” he said. “While employment is slowly growing pent-up demand is softening to the point I feel a 3 percent increase may even be a bit conservative. There are concerns but this is the sixth Holiday Season of the downturn and even a modest improvement should equate to more confidence and spending. This is with the assumption the Government shut down doesn’t go on for more than a week or so. If it does, we could end up in a recession. “

Forecasts from industry stakeholders at last week’s FTR Transportation Conference in Indianapolis were more muted, with sluggish recovery in GDP growth compared to previous economic recoveries.

October 15, 2013

About the Author

Jeff Berman, Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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